MSG Battles Barclays Developer in Nassau Coliseum Bid

Gary Harding has been going to Nassau Veterans Memorial Coliseum since 1972, when he was 9 and both the venue and its New York Islanders National Hockey League team were new.

Compared with Manhattan’s Madison Square Garden, which he found “claustrophobic,” the Long Island arena “seemed a little brighter, more comfortable,” he said. “It was just a great place to see a game, with a great atmosphere.”

Now, pipes sometimes burst and coils pop out of the seats. When there’s a sellout crowd, the lines for the bathrooms can be 50-people long, Harding said. Even he -- former president of the Islanders Booster Club, a 24-year season-ticket holder and top blogger at -- knows radical change must come to his home away from home, the oldest NHL arena after the Garden.

“As people used to say about Shea Stadium, it’s a dump, but it’s our dump,” he said.

Nassau County Executive Edward Mangano plans to announce tomorrow the developer who will take over and remodel the 40-year-old venue in Uniondale, choosing between a plan by the owners of the Garden and another by the company behind Brooklyn’s new Barclays Center. The announcement was delayed from today because of the shooting of a Nassau County police officer. The winner would have to manage without the Islanders, the coliseum’s primary tenant, who will move to Brooklyn in 2015 after their Nassau lease expires.

Abandoned Arenas

Major-league sports arenas typically have struggled once they lost their marquee tenants, said Andrew Zimbalist, a sports economist at Smith College in Northampton, Massachusetts. In Dallas and Miami, arenas were demolished years after the teams that played there left for newer buildings.

“I can’t think of a situation where it’s worked, where an arena that lost its teams was re-established as a vibrant arena,” said Zimbalist.

Nassau Coliseum is different, according to Mangano and principals for the two bidders, New York-based Madison Square Garden Co. and Forest City Ratner Cos., whom the county executive called “moguls in the industry.”

First and foremost, they say, is the old real estate adage, “location, location, location.” The coliseum sits almost at the center of Nassau County. Together with Suffolk to the east, the two counties have a combined 2.85 million people, more than the population of Chicago, the third-largest U.S. city. Among the nation’s wealthiest counties with a population of half a million or more, Nassau ranks 12th and Suffolk 26th, according to 2011 Census Bureau data.

No Subsidies

Proof that the arena remains viable is that four bidders, including the two finalists, were willing to take on the renovations without public subsidies, said Mangano, whose choice for the project must be approved by the county Legislature.

Nassau County owns the arena and its 77-acre (31-hectare) site. The coliseum generates about $2.6 million of revenue a year for the county through rent, a share of concession sales and a tax of $1.50 per ticket sold, according to a 2011 report by the county comptroller. In 2010, the arena drew 856,349 people, just more than half of that for Islanders games.

The Islanders were last in the NHL in per-game home attendance during the 2012-13 season, with an average of 13,306 people filling the 16,170 seats in the coliseum’s hockey configuration, according to data on the ESPN sports network website. Their 82.3 percentage figure for tickets sold ranked the Islanders 28th in the 30-team league.

After the Islanders decided to leave, the county last year asked Forest City Ratner to study the coliseum’s future, with the failures in other cities in mind, Mangano said.

Dallas, Miami

Dallas’s Reunion Arena was torn down in 2009, almost three decades after it was built and eight years after the National Basketball Association’s Mavericks and NHL’s Stars abandoned it for the new American Airlines Center. The 20-year-old Miami Arena was demolished in 2008, about a decade after NBA’s Heat and NHL’s Florida Panthers left for newer buildings.

Northern New Jersey’s 32-year-old Izod Center has survived mainly on concerts and family shows, such as Disney On Ice, since the Devils NHL team moved to the new Prudential Center in Newark in 2007, followed by the NBA’s Nets three years later. The basketball team, which played at Nassau before moving to New Jersey in 1977, is now the anchor tenant at the 1-year-old Barclays Center.

Only a small percentage of Barclays event-goers come from Long Island, Bruce Ratner, Forest City Ratner’s executive chairman, said in a telephone interview.

“The big difference is, in all of those cases, another arena replaced those arenas,” he said. “It’s not like we’re taking away an existing market. If someone all of a sudden built another major arena in Manhattan and took the two teams, then obviously the other one wouldn’t do too well.”

‘Decrepit State’

Scott Rechler, the Long Island developer who is a partner on Madison Square Garden’s entry, said that “historically, the coliseum has done very well, even in its decrepit state, for concerts and other shows, the circus. I remember even as a kid when the circus would come to town, they’d take the train to here, and they’d actually walk the animals, including the big elephants, down Hempstead Turnpike.”

Among acts that played at the coliseum this year were the country singer Miranda Lambert, New Kids on the Block and the Vans Warped Tour. Upcoming events include Sesame Street Live, WWE Raw pro wrestling and a Sept. 1 show by the singer Marc Anthony.

Concert Sales

The Coliseum was 12th among U.S. indoor arenas by tickets sold in first six months of the year, according to data from Pollstar, a concert-industry trade publication. Barclays Center was first. Madison Square Garden, which shut down in May for renovations after its teams were eliminated from the playoffs, was ninth, and Prudential Center ranked 11th. Pollstar counts only concerts and family shows, not big-league sports events.

The competition to redevelop the coliseum pits MSG, owner of the NBA’s New York Knicks, against Ratner, minority owner of the rival Brooklyn Nets. Both operators, who Zimbalist compared to Shakespeare’s Montagues and Capulets, say they’ll use access to their own glamorous arenas to encourage acts to perform in Nassau.

“You don’t want to underestimate the booking power of the metropolitan area,” Rechler said. “Having the booking power of Madison Square Garden, it will become self-reinforcing for why it will be successful. It’s leverage, leverage and leverage.”

MSG’s empire also includes control of Manhattan’s Radio City Music Hall and Beacon Theatre, the historic Chicago Theatre on that city’s State Street, and the recently acquired Los Angeles Forum, abandoned by the NBA’s Lakers and the NHL’s Kings in 1999. The landlord plans to spend $100 million to transform the Forum into a full-time concert venue, reopening in January with a show by the Eagles, the company said last month.

Flexible Seating

MSG has proposed spending $250 million on the coliseum and its surroundings, developing a flexible seating system that would accommodate as few as 1,700 or as many as 14,500 spectators, down from the current maximum of 18,000. Working with Baltimore-based Cordish Co., creator of the entertainment districts Power Plant Live! in Baltimore and XFinity Live! in Philadelphia, they plan a 150,000-square-foot (14,000-square-meter) zone that would be filled with restaurants, sports bars and leisure activities.

The Garden also would move into Nassau at least one of its other sports franchises -- the New York Liberty of the Women’s NBA, the Hartford Wolf Pack minor-league affiliate of the NHL’s Rangers, or the Knicks’ development league Erie Bayhawks.

‘Tremendous Appetite’

After four decades of NHL hockey -- punctuated by four straight Stanley Cup championships in the early 1980s -- Long Islanders “will support minor-league sports if it’s quality sports,” Rechler said. “Liberty basketball, I think there’d be a tremendous appetite for. Women’s sports in Long Island is very active in college and high school. There’d be a big population attracted to that.”

Forest City Ratner’s $229 million proposal tempts locals with six Islanders games each year and would bring in an as-yet-unidentified minor-league team.

Bruce Ratner has played up his partnership with Jay Z’s Roc Nation LLC entertainment company -- whose artists include Rihanna, Shakira and M.I.A. -- bringing the rap superstar to a presentation in May before Nassau County’s business advisory council.

Ratner also has teamed with Live Nation Entertainment Inc., the biggest U.S. concert promoter and ticket seller, which, together with Jay Z’s organization, would drive more than 50 concerts a year to the coliseum. All told, Ratner said he already has commitments to fill more than 200 calendar dates with events at the Long Island venue, including 38 minor-league hockey games, 54 family shows and 83 parking-lot events, such as barbecue competitions and classic-car exhibitions.

Architecture Firms

The Forest City Ratner plan would reduce the arena’s maximum capacity to about 13,000, with configurations for as few as 4,000 seats.

Both contenders are planning a new look for the coliseum, with Ratner using SHoP Architects, the Barclays Center’s designers, and MSG working with BBB Architects, the Canadian firm that conceived the Garden’s $1 billion renovation project.

For people like Harding who worship the Islanders’ orange and blue, the Ratner plan is “the lesser of two evils,” he said, mainly because MSG owns the hated Rangers. A proposed sports bar that would feature Islanders memorabilia would hardly make up for that, said Harding, a Huntington resident.

“It would be tough to see the enemy take over our building,” he said.

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